Victoria ordinance would limit tax rate increases

Also on the agenda

• Whether to award a $722,753 bid for the Conti Lane sanitary sewer line extension project;

• Whether to approve the terms and conditions of two tax abatement amendments with Caterpillar.

Victoria City Council members will vote Tuesday to reinstate a cap on tax rate increases.

First, they must decide whether the ordinance is a positive fix or goes against voter intent.

Voters approved an amendment in the May 12 election that brings the city charter's tax code to 2012 procedures, and, in doing so, removed a 5-percent cap on tax rate increases that had been in place since 1981. The state's cap is at 8 percent.

Councilman Tom Halepaska, who led the charter amendment committee, said that while he supports reinstating the 5-percent cap, the procedure is wrong.

"I believe 81 percent of the voters knew exactly what they were doing," Halepaska said.

"The time to address this would be by the vote of the public in another two years," Halepaska said. "For council to second-guess such a large majority of people that voted for it is inappropriate."

Councilman Emett Alvarez requested the ordinance.

He said he wants to "offer something that will alleviate some heated discussions" between council and voters with misunderstandings regarding whether the cap applied to both debt services and maintenance and operation tax rates or only maintenance and operation.

"This ordinance is making the distinction that the 5 percent is only for the maintenance and operation rate," Alvarez said. "I'm hoping that this ultimately will satisfy both sides so we can drop the back and forth."

Under the ordinance, the maintenance and operations portion of the city's tax rate cannot be increased by more than 5 percent over the effective maintenance and operations rate. There is no cap on the debt service tax rate because constitutional provisions require the city to pay its debt, according to information from the city.

However, Halepaska said, the focus should not be on the number, but on voters' decisions. He will not be at the July 3 meeting.

The charter review's intent "was to clarify it to make the ordinary voter be able to read it," he said.

Halepaska called the ordinance "grandstanding" and "ineffective." However, Alvarez said it is "the best we can do for now."

"Hopefully if we take it back to the voters in the future, it will be a clear understanding of what the intent is," Alvarez said.

Nonetheless, if council intended to maintain the 5-percent limit on rate increases, the amendment could have been written as such.

Councilman Paul Polasek, who served on the charter committee, said they considered trying to encompass it all in one fell swoop, but were concerned about voter confusion.

Because the committee was an ad hoc committee of council and included less than a quorum of council members, record-keeping requirements of the Texas Open Meetings Act did not apply, City Attorney Thomas Gwosdz said in an email.

Polasek said he does not have an issue with supporting the ordinance, but said it is only a temporary fix.

Polasek said the ordinance will "reassure the citizens of the council's intent" to maintain the 5-percent cap on maintenance and operation tax.

"There is no intent - and we never have since 1981 - to increase taxes over 5 percent," Polasek said. "This council, as it exists today, would not do that."

The ordinance would not necessarily bind future councils to the cap. A new council could repeal the ordinance and exceed the 5-percent cap at any time, so long as it did not exceed the state's cap.

"We need to get it back in the charter so it has some teeth," Polasek said.